Plymouth has been identified as one of the UK’s ‘hot spots’ for hotel development and acquisition.

The city has been ranked for the first time in the Top 10 of the UK Hotels Market Index (UKHMI) produced annually by global real estate advisor Colliers International.

It has risen nine places from 16th last year to 7th this year, and is also placed in 4th position in a sub-category for the Top Five ‘Rising Stars’ of UK cities for hotel investment, and in 3rd place in a sub-category for Top 5 ‘RevPAR Growth’ which shows the cities that have demonstrated the most significant compound average growth in terms of Revenue Per Available Room over the past four years.

Ed Jefferson of the Hotels team covering the South West for Colliers International said the Plymouth hotels market benefitted from a range of strengths highlighted in research for the 2018 UK Hotels Market Index, which is now in its third year.

“Plymouth is a growing market and has experienced an increase of around.£9 in its Average Daily Rate (ADR) for rooms year-on-year,” he said.

“In addition, compared to last year Plymouth has a slightly lower active pipeline – that is, the total number of rooms expected to enter the market over the next two years as a percentage of total existing room supply.

“It is also important to note that the city is preparing for its Mayflower 400 celebration in 2020, which will mark the 400th anniversary of the Mayflower sailing from Plymouth UK to Plymouth Massachusetts, which is expected to provide a considerable boost to hotel occupancy.”

The Colliers International UK Hotels Market Index from Colliers International’s is compiled from analysis of nine key performance indicators (KPIs) to score each of 34 locations with a figure from one to five (one being the lowest and five being the highest).

The determining indices include land site prices; build costs; market appetite; valuation exit yields; room occupancy; average daily rate; room occupancy rates; four year RevPAR trend; active pipeline as a percentage of current supply; and, construction costs. The ratings are then consolidated into a single figure and ranked to show which markets are hot in terms of a desirable location for investors to acquire an existing hotel or develop a new one

Marc Finney, Head of Hotels & Resorts Consulting, Colliers International said: “The data in our third annual report reveals the ever-changing nature of the UK hotels market.

“Our Index is formulated in such a way that high land and construction costs and sluggish hotel market growth are penalised. That’s why some markets will rank lower than expected.

“Of course this is a general market index and site specific factors will lead to significant variances.”

Top Ten UK Hot Spots for Hotel Investment and Development:

Ranking

City

1

Edinburgh

2

Bath

3

Belfast

4

Cambridge

5

Bristol

6

Cardiff

7

Plymouth

8

London

9

Oxford

10

Glasgow


 

Detail - Top Ten UK Hot Spots for Hotel Investment and Development; Top 5 Rising Stars; Top 5 RevPAR Growth:

UK Hotel Market Index 2018

Top 10

City

Colliers UK Index 2018

2017 Index

2017 Ranking

Change in position

1

Edinburgh

3.97

3.68

5.00

4

2

Bath

3.90

3.56

12.00

10

3

Belfast

3.78

3.44

19.00

16

4

Cambridge

3.68

3.66

6.00

2

5

Bristol

3.66

3.69

4.00

-1

6

Cardiff

3.63

3.60

11.00

5

7

Plymouth

3.60

3.50

16.00

9

8

London

3.59

3.56

12.00

4

9

Oxford

3.55

3.77

3.00

-6

10

Glasgow

3.47

3.35

23.00

13

Top 5 rISING sTARS

Top 5 rising markets in the index.

Top 5

Market

Change in Position

1

Belfast

16

2

Glasgow

13

3

Bath

10

4

Plymouth

9

4

Hull

9

Top 5 RevPAR GRowth (CAGR 2013-2016)

Top 5 markets that have shown the most significant compound average annual growth in terms of RevPAR over the past four years. Some of these markets have grown significantly albeit from a low base.

Rank RevPAR Growth

City

CAGR 2014 - 2017

1

Belfast

12.6%

2

Hull

9.7%

3

Plymouth

8.4%

4

Sheffield

7.6%

5

Edinburgh

7.5%